Should you keep renting or buy a home? A lot of people wrestle with this question, especially in the current economic climate. There are some valid reasons why for some people renting is a better option but for most people buying a home is going to be the smarter economic choice.
Why Buying A Home Is The Better Choice
There are a lot of reasons why people want to buy a home including to give their kids a stable place to grow up or to be more comfortable. But the primary reason that buying a house is better than renting is that buying a home starts you on the path to better financial stability. If you want to have money in the future to retire on, or money to pay for your child’s college education, or a nest egg that you can draw on if you become ill or disabled buying a house can give you that financial security. Renting doesn’t help you accumulate wealth, it helps a landlord accumulate wealth.
The Cost Of Renting
Renting a home or an apartment does give you the flexibility to move easily if you need to and for some people that flexibility matters more than financial stability at this point in their lives. But for most people renting is throwing away money. If you’re renting a home for $1700 a month, and the person who owns that home is paying $1200 a month for a mortgage they are pocketing $500 a month or $6,000 a year. Of your money. Even after they pay for expenses they are making a tidy sum off of your rent.
If you buy a home your mortgage payment that you pay every month will be helping you build equity in your home. Over time your home is a huge financial asset. You can sell your home and buy a different home or you can pay off your mortgage and stay in your home paying just the taxes each year and having no housing payment at all.
Buying A Home Is Easier Than You Think
A lot of people dream about buying a home but they don’t pull the trigger on purchasing a home because they mistakenly think that the home buying process is too difficult or that they don’t have enough money for a down payment. But a lack of a hefty down payment isn’t a barrier to buying a home anymore. It’s true that the larger your down payment is the lower your mortgage cost will be. But these days you don’t need to put down a 20% down payment like was required in the past. People can buy homes with a small down payment or in some cases no down payment at all.
The process of buying a home may be confusing for a first time buyer, but if you are working with an experienced real estate agent that can guide you through the process it won’t be as intimidating as it might seem right now.
The Steps In Buying A Home
Working with a real estate agent who knows the local market can make the buying process easy. A real estate agent can help you with each part of the buying process including:
Get Pre-Approved
Getting pre-approved for a mortgage will help you figure out how much you can comfortably afford to spend on a new home. Your real estate agent can help you decide what your priorities are in a new home and figure out the best way to get the function you need in a new home at the price point you’re comfortable with.
Get Your Finances In Order
A large part of the home buying process is making sure that your finances are in order for the purchase. A real estate agent can walk you through the financial part of the buying process and help you get all your finances in shape for the purchase.
Find A House
This is the fun part! A real estate agent can show you homes in your price range that have the style you like and the function you need. Let your real estate agent show you houses that you might not think are a good fit because your agent has the expertise to find you the perfect house.
Make An Offer
Once you find that perfect house your agent will write up an offer and start the process of negotiating for that home. If the offer is accepted then you will move to the closing part of the sale and the process will be almost complete.
Closing
The closing is the final part of the sale. But before the closing there are a lot of steps like getting a home inspection, final negotiations, and getting the money from the lender to buy the home. Your real estate agent can take care of all the communication with the seller and the lender and all the other people involved in the sale. When the closing finally comes you will go with your agent to sign all the papers and get the keys for the home.
Move In
After the closing there’s nothing left to do but move in and start building all that equity. Every month when you pay your mortgage you are investing in your future. Owning a home is one of the best assets you can have.
